Shivaramaiah A. vs Chardappa Pai

Chandrashekhar, C.J.-This revision petition has been referred to a Division Bench by Jagannatha Shetty, J. as he felt that the question involved in this petition relates to the scope of Sec.7 of the Karnataka Debt Relief Act, 1976 (hereinafter referred to as the ''Act'') and that that question is of considerable importance and will be raised in many cases.

This is a defendant''s revision petition against the order of the Civil Judge who rejected the application, IA.No.3, made by the defendant praying that the plaintiff might be directed to lead evidence on additional issue No.5. That issue reads:

"Does the defendant prove that he is a debtor as defined under the Act and if so, is he not entitled to the protection of the aforesaid Act?"

The learned Civil Judge held that issue had been rightly framed, that as such, under Sec.7 of the Act it was for the defendant to prove initially that he was a debtor as defined in the Act and that them it was for the plaintiff to prove that he (the defendant) was not entitled to the benefits under the Act. In that view, the learned Civil Judge directed the defendant to adduce, first, evidence on that issue.

In this revision petition, Sri S.M. Hegde, learned Counsel for the petitioner, contended that the non-obstante clause in Sec. 7 provides that the burden of proving that the defendant is not entitled to the protection under the Act, is on the creditor-plaintiff and that, hence the learned Civil Judge was in error in holding that such burden of proof was on the defendant.

The question on whom is such burden of proof, is no longer res integra in view of the ruling of another Division Bench of this Court in Ganesh Bisto Desai v. Nagesh Bisto Desai, (1977) 2 Kar LJ. 476. There, the Division Bench observed at page 477:

"To be entitled to relief under the Act, appellant must show that two conditions coalesce. The first is that they must show that they are debtors by the statutory standard. Secondly, they must show that the transaction respecting which they claim relief is, and the liability the discharge of which they seek arises out of a ''debt advanced''."

However, Sri Hegde contended that the aforesaid observations of the Division Bench were obiter dicta since it was not necessary for the Division Bench to decide that question in that case.

In Ganesh Bisto Desai''s case, (1977) 2 Kar LJ. 476 the material facts were these: The decree holder had taken out execution proceedings for realising costs awarded under a decree. The judgment-debtors filed objections as to executability of the decree against them on the ground that they were ''debtors'' within the meaning of clause (c) of Sec.3 of the Act and that hence their liability under the decree must be deemed to have been wholly discharged. The executing Court had held that they were not ''debtors'' within the meaning of Sec.3(c) of the Act. The correctness of that finding was assailed in the appeal which was ultimately heard by the Division Bench. It was contended for the decree holder that even if the judgment-debtors were ''debtors'' within the meaning of Sec.3(c), in order to be entitled to any relief under the Act, they had also to show that their liability was in respect of a ''debt advanced'' as provided in Sec.4 of the Act and that the costs awarded under a decree could not be regarded as a debt advanced. The Division Bench upheld the contention that costs awarded in the suit could not be regarded as ''debt advanced'' within the meaning of Sec.4 of the Act and that, hence, the liability to pay costs was not wiped out by Section 4 of the Act.

There is considerable force in the contention of Sri Hegde that when once the Division Bench held that costs awarded under a decree could not be regarded as ''debt advanced'', there was no need for it (the Division Bench) to go into the question of burden of proof under Sec.7 of the Act. Even if the aforesaid observations of the Division Bench were obiter dicta, we are in respectful agreement with the interpretation of Sec.7 of the Act by the Division Bench.

8.In Veerayya Vandayar v. Sivagami Achi, AIR. 1949 PC. 319, a similar question arose as to burden of proof under the Madras Agriculturists'' Relief Act, 1938. Sub-sec.(2) of Section 3 of the Act defined ''Agriculturists''. Provisos C and D to that Section stated that a person shall not be deemed to be an agriculturist in certain circumstances set out therein. Dealing with the question of burden of proof in a suit where the defendant claimed to be an agriculturist within the meaning of that Act and entitled to the benefits thereunder, this is what the Privy Council observed at page 320:

"In the first instance no doubt the burden was upon, the appellants to show that they were agriculturists. But having shown that they fell within the general definition of that word they would be entitled to relief unless they were deprived of the privilege by one of the provisos and the burden would lie upon any one so asserting to prove his case."

The enunciation by the Privy Council in the above decision regarding the burden of proof, has been incorporated in Section 7 of the Act.

However Sri Hegde sought to derive support from certain observations of a Full Bench of the Allahabad High Court in Kishan Chand v. Ram Babu, AIR. 1965 All. 65 while dealing with the question of burden of proof under the U.P. Agriculturists'' Relief Act. 1934. Sub-sec. (2) of Sec.2 of that Act contained the definition of the word ''agriculturists''. The proviso to that sub-section stated that though a person was an agriculturist, if he paid income-tax exceeding a certain amount, he would not be entitled to benefits under that Act. Desai, C.J., who spoke for the Full Bench, stated, that the onus of proving that he, was on, agriculturist was, undoubtedly, on the defendant, while the onus of proving that the proviso applied to him was on the plaintiff. This enunciation accords with that of the Privy Council in Veerayya''s case, AIR. 1949 PC. 319 and we do not see how this decision supports Sri Hegde. However, he referred to the observation of the Full Bench that the power of a legislature to regulate the allocation of burden of proof in the Courts, is undisputed and that the legislature is free to cast the onus of proof upon a party regardless of the fact that the circumstances are peculiarly within the knowledge of the other party. While we are in respectful agreement with these observations, we do not see how they have any relevance to the interference of Sec.7 of the Act.

Lastly, it was contended by Sri Hegde that if the burden ofproof is as laid down by the Division Bench in Ganesh Bisto Desai''s case, (1977) 2 Kar LJ. 476 (Supra), there was no need for enacting Section 7 and that the interpretation of that section by that Division Bench in Ganesh Bisto Desai''s case, (1977) 2 Kar LJ. 476 (Supra), would render Sec.7 of the Act redundant and purposeless.

Quite often, statutory provisions are enacted to give statutory recognition to principles enunciated in judicial decisions and to put matters beyond doubt. It may be, that even in the absence of Sec.7, the burden of proving that a ''debtor'' was not entitled to protection under the Act, would be on the creditor. But, on that score we cannot give to such a provision an interpretation which it does not reasonably bear. We are unable to accept the contention of Shri Hegde that Sec.7 of the Act imposes on the creditor the burden of proving that the person who claims to be a ''debtor'' as defined in the Act, does not come within that definition. We do not find any good ground to dissent from the view expressed by the Division Bench in Ganesh Bisto Desai''s case, (1977) 2 Kar LJ. 476. 12. As the decision of the learned Civil Judge is in accordance with the enunciation in Ganesh Bisto Desai''s case, (1977) 2 Kar LJ. 476 (Supra), we do not see any good ground to interfere with his order. In the result, this petition fails and is dismissed.

In the circumstances of the case, we direct the parties to bear their own costs.